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Rural non-farm employment and household welfare : evidence from Malawi (Inglês)

This paper uses nationally representative panel data and a combination of econometric approaches, to explore linkages between rural non-farm activities (wage and self-employment) and household welfare in rural Malawi. The paper analyzes the average treatment effects and distributional effects on participants' welfare indicators, such as households' per capita consumption expenditures. Then it investigates the effects of non-farm activities on the use of agricultural inputs, one channel through which non-farm employment might improve the welfare of rural households. Although participation in non-farm activities is not randomly assigned in the data, the identification strategy relies on fixed effects and correlated random effects estimation methods, dealing effectively with time invariant heterogeneity, coupled with geographical covariate adjustments, controlling for time varying differences in local market conditions and employment opportunities. The results suggest that non-farm wage employment and non-farm self-employment are welfare improving and poverty reducing. However, households at the lower tail of the wealth distribution benefit significantly less from participation than the wealthiest. Although the results support the promotion of the rural non-farm economy for poverty reduction purposes, they indicate that targeted interventions that improve poor households’ access to high-return non-farm opportunities are likely to lead to bigger successes in curbing rural poverty.


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    Adjognon,Guigonan Serge, Liverpool-Tasie,Saweda Lenis, De La Fuente,Alejandro, Benfica,Rui Manuel

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    Documento de trabalho sobre pesquisa de políticas

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    Rural non-farm employment and household welfare : evidence from Malawi

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    farm wage employment;short period of time;access to financial service;per capita consumption;average treatment effect;local poverty line;poor rural household;household consumption expenditure;investments in agriculture;unit of labor;agricultural wage employment;unit labor;square poverty gap;maximum likelihood estimation;effects of income;crop and livestock;promotion of employment;amount of land;distribution of household;labor market condition;panel data estimation;panel data set;local market condition;cumulative distribution function;log linear model;household food consumption;rural credit market;households with consumption;source of income;source income;international poverty line;price of fertilizer;Access to Electricity;difference in wages;poor rural people;patterns of participation;highly skilled labor;average monthly wage;purchasing power parity;agricultural crop production;test of equality;rural financial service;presence of binding;increased agricultural productivity;fixed effect method;parameter of interest;standard normal distribution;household at time;cost of living;economically rational household;temporal price index;participation rate;explanatory variable;welfare effect;expected return;household enterprise;household income;Agricultural Investment;entry barrier;household welfare;manufacturing sector;agricultural activity;income share;marginalized group;social network;consumption aggregate;estimation result;household characteristic;agricultural asset;peer effects;poverty status;instrumental variable;positive correlation;Poverty Analysis;welfare outcome;primary sector;rural area;tourism sector;efficiency gain;unobserved characteristic;labor allocation;farm activities;standard error;farm household;independent variable;tobacco manufacturing;measurement error;household head;living standard;food insecurity;poor household;ceteris paribus;resource constraint;Capital Investments;wealth distribution;agricultural sector;conditional expectation;quantile regressions;geographical area;marginal utility;pull factor;push factor;productive capital;household participation;transport equipment;negative effect;summary statistic;rural economy;inconsistent estimate;farm activity;reveal preference;geographical region;farm investments;persistent poverty;fertilizer application;poverty equations;sales worker;agricultural practice;response variable;land area;asymptotically equivalent;life expectancy;allocation decision;rough estimations;household earning;average household;descriptive statistic;household labor;discount factor;agriculture production;food crop;econometric estimation;social effect;employment categories;business opportunity;social status;sewing machine;Agricultural Technology;community level;productive activity;household benefit;household purchases;estimation technique;forestry worker;incidental parameter;Animal Husbandry;education level;budget constraint;poverty headcount;survey instrument;Job Creation;street vendor;fertilizer purchase;binary decision;food product;retail trade;average profit;life span;aggregate expenditure;idiosyncratic error;durable good;empirical analysis;empirical approaches;important policy;crop failure;Durable goods;extreme values;privileged groups;average consumption;panel framework;econometric approach;employment opportunities;employment opportunity;likelihood function;household size;linear function;household composition;household ownership;seasonal variation;density function;marginal distribution;statistical package;welfare indicator;effect model;normal density;poverty incidence;corner solution;geographical location;effective policies;entrepreneurial activity;conceptual framework;empirical evidence;income smoothing;financial constraint;agricultural estate;expected utility;surplus labor;income rise;family labor;free labor;off-farm income;agricultural production;welfare distribution;future research;small country;marginal return;modern production;poverty reducing;agricultural input;estimation strategy



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